How to Deal with Bad Contractors and Get Your Money Back.
Have you ever hired a contractor who took your money and never showed up again? After a bad contractor ran away, now what? Many homeowners across America have met with the situation just like you, but very few knows what to do to get their money back. Many times these bad contractors think they can get away with it as it would cost more for you to hire an attorney to go to court. During our renovation process, we too have our share of “Bad Contractor” dealings. Take a look at Our Experiences with this retaliatory contractor and how we have finally WON and got our money back.
We are a real estate wholesaler and flipper in Southern California and we are not an attorney or real estate agent. But we would like to share some valuable experience in dealing with Bad Contractors. Here is what you need to do after you hired a contractor.
Document if Everything
Renovations have a lot of moving parts. Many of times the agreement between you and your contractor just simply cannot explain everything in detail. Bad contractors know this and use it to his or her advantage. He or She will start out with a low bid to get your job and add on later by any means necessary. To protect yourself, you need to document everything from the beginning to the end of your renovation. Check in constantly and get updates. Take pictures of ongoing renovations daily, save all of your text messages with your contractor and document phone conversations when occurs. Always and always update your agreement whenever there are changes and re-initial and date changes to avoid surprises with extra charges.
State Contractor Licensing Board
Every state has an official contractor license board, here in California the State Contractor License Board allow you to look up a contractor’s license status and if a contractor is properly insured. On the site, you can also File a Claim if your contractor has done something wrong and he or she is unwilling to resolve your issue. The process many take a while, but the investigators there will definitely help. Just make sure to give a detailed statement and send them all of your documentations, photos, and agreements.
Does your contractor have a Responsible Managing Officier? An RMO is someone that must exercise direct supervision and control of daily construction operations. The person who works with an RMO may then obtain a contractor’s license without taking an exam after a certain period of time. If so, does he or she come to the job site daily? If not this RMO could be fined or jailed for the contractor’s wrongdoing.
Bond’s company won’t pay unless State Contractor License Board finds the complaint in favor of you. This will take time, and you need to work closely with the board. Provide all documentations and photos necessary. If your contractor does not have the financial means to pay you back this could be the only way to get your money back.
After our contractor ran away, we said: “Now What?” Luckily we had documented everything and took photos and saved all of our text communications. At first, it was really slow as the board has many cases to review, but the investigator who looked at our complaint and found overwhelming evidence then it was action time. Communications from the board with the RMO and contractor started immediately. Within days, negotiation started and soon after a settlement was reached and we are finally getting our money back. Till this day when we are writing this blog, this contractor is still paying us back.
Check and double check your contractor and check his or her references before you hire. Never and never let contractor pay for material, always separate labor cost and material cost. Most importantly do not pay upfront only pay as agreed, it doesn’t matter how your contractor begs you. Lastly, document everything. Come back later as we will be discussing how to find a realiable contractor.